The story of PONG (not to be
confused with Tennis, invented by Ralph Baer) started
much earlier than 1972. At the end of the 1960's, Steve Russell's
"Space War" game had been circulating throughout many campus'
and companies' huge and expensive PDP computers.
Nolan Bushnell envisioned this game being played by the masses.
He set to work to build a simpler and less expensive platform to play his
version of Space War... the result was Computer Space. The game
was sold by Nutting Associates, Inc. and would bear the
marking "Syzygy Engineered" to represent Nolan and fellow partner
Ted Dabney's new company: Syzygy, which would later become
officially Incorporated on June 27, 1972 as Atari, Inc. (Nolan
enjoyed playing japanese chess game "Go", where "Check" translated as
"Atari" in Japanese, hence the new company name).
Only 1,500 Computer Spaces were sold and did not meet with favorable
response from the game players.

In an interview, Nolan explained the main problem he had with Computer
Space: "You had to read the instructions before you could play,
people didn't want to read instructions. To be successful, I had to
come up with a game people already knew how to play; something so
simple that any drunk in any bar could play."

Nolan and Ted would go it alone and hire Allan Alcorn to design
the first game under the Atari name: PONG. "PONG" was choosen for
its meaning: a hollow, ringing sound, which was exactly what Nolan
wanted in the game. Amazingly, Alan had no idea how to get some sound from the
initial version of the game. Therefore he took a speaker (amplified) with one
wire connected to the ground of the circuit board, and the other to be
eventually connected to the point giving the best possible sound effects. And so
was born the PONG sound that we all know!

If Allan Alcorn designed PONG, he did not invent it. As a matter of fact,
Magnavox was putting their new Odyssey home video game console in
demonstration in May 1972. On May 24, Nolan went to the demonstration held at
the Magnavox Profit Caravan at Burlingame, California where he signed the
guest book and played the predecessor of PONG: Tennis. Then, he told Allan
Alcorn to design PONG.

However, it would be very unfair to base the history on this fact. Many people
consider that Bushnell and Alcorn pirated the Tennis game that Ralph Baer and
his co-workers designed in 1967. Not only this isn't quite true, but in fact they did a better version of it, taking
advantage of the TTL technology which by then became affordable, at least in the
arcade business. The result was an improved game with segmented paddles and
bounces, digital on-screen scoring and attractive sound effects.

David Winter's opinion is simple: who blames Bill Gates for having copied the BASIC
programing language to port it to millions of home computers (including
the apple 2) between 1975 and the late 1980s ? Nobody. He had the best idea of
its time and allowed everybody to have a computer at home and program it using a
simple language. This is pretty much the same with PONG: in 1972, you would not go to a retail store to try an Odyssey except for a very short time. PONG and its clones were
the best advertisements for the video game. By going to a bar and playing the
game, everybody could enjoy it and eventually buy an Odyssey to play at home. It
is obvious that the Magnavox Odyssey sales would not have had the same success
without PONG, so thank you guys, you did very well !

By 1972, Nolan Bushnell
would leave Ampex and go into business with Ted Dabney and Larry Byron.
Larry would soon drop out leaving just Nolan and Ted. The idea was to create
the game technology and license it to other companies to build such as they
did with Computer Space to Nutting Associates. However, by the time PONG had
finished its testing phase at a local bar called Andy Capps Tavern, owned
by Bill Gattis. Nolan
realized that there was more to be made if he and his partner sold the game
themselves. November 1972 saw the first production PONG games rolling off the
assembly line. This assembly line run out of a converted Roller Rink off of
Winchester Blvd. (According to Nolan Bushnell: 38,000 Pong's were built and
sold).

A strange arcade game:

PONG simulation by and (C) Martin Goldberg.Click to start,
move using your mouse.

Developed with
the assistance of Alan Alcorn.External use is strictly prohibited
withoutprior approval of Martin Goldbeg.

Mounted on pinball bars, the PONG prototype machine had
an amazing story while being put in demo at Andy Capp's Tavern. It was installed
by Nolan and Al themselves. After turning it on, they went to the bar, drunk a
few beers while waiting that somebody plays the game. Two guys finally walked to
it. Unlike the long told myths, there were no instructions on the front panel
("Avoid missing ball for high score" only appeared on the commercial version as
shown on the left). The only way to know how to play was to insert a quarter
(quite a price when most games only cost a penny) and observe. Once done, two
paddles appeared on both sides of the screen. A ball then traveled through the
screen and disappeared with a specific sound, while one of the scores increased
to 1. The guys quickly undertstood how to move their paddles using the rotary
knobs and dispute a match.

When the game was over, Nolan went to the guys
and asked what they thought about the game. Unexpectedly, both tried by all
means to know who designed it. A few more beers later, Nolan and Al left the bar
without seeing anybody else play.

The next myth is what happened the next
day. No, the game did NOT fail. No, the quarters DID NOT fill the coin recipient
so as to fall on the circuit board and produce short circuits. However, it is
true that Bill Gattis called Nolan and Ted to say that there was an unexpected
line of people waiting to play the game. Unlike what was told, these guys
weren't the usual drunks. They had no drink in hands, and they were working at
Ramtek, a company who would join the arcade games venture and release their pong
clones during the next Spring. The exact reason of their presence is still
unknown, but it is belikeved that one of the two players who tried the game the
previous day knew somebody at Ramtek.

The only known failures of the game
were totally different than what has always been told. The first failure happend
about about two weeks later. Bill called again and Al came to fix the game. What
exactly happened remains unknown, but the angry guys were given a free play. The
real failure happened in the next week when the paddles wouldn't move correctly.
As it happened, the game used normal grade potentiometers. Al calculated the
average number of spins per game and figured that the potentiometers would be
actually spun about 100,000 times in a month, way over what they were designed
for. And so Al replaced them by Allen Bradley's military grade ones. Al also
opened the laundromat coin mechanism and found around $100 in quarters filling
the recipient (meaning around 400 plays since last emptied).

Nolan
understood the potential of the game and flew to Chicago to demonstrate it to
Bally using a portable version directly connected to a TV set. Bally wasn't
convinced. Nolan repoted the unlucky event to Al and Ted, and the team opted to
make twelve games: one on permanent display at Syzygy/Atari, one to be sent to
Bally for evaluation, and ten to be demonstrated in public venues. The earnings
from these ten games were much over what the team expected. After writing down
an income report for the ten machines, they found the results much over what
Computer Space generated and thought that Bally would not believe them. So they
decided to cheat the results by cutting the earnings down to a third. But this
didn't convince Bally either, who found the results too high. The team was
stuck: in the one hand they knew that they had a successful product, but in the
other hand their product was stuck by a contract which avoided any other
submission until Bally rejected the game, which they wouldn't do.

Meanwhile, Nolan went to the MOA Show in Chicago in September 1972 where the
portable PONG game was being demonstrated at the Nutting booth, along with a
2-player version of Nutting's Computer Space. As it happened, that Computer
Space didn't contain Nolan's design, but another prototype made by an engineer
that Bill Nutting contracted, thus avoiding to pay royalties to Syzygy/Atari.
With Nutting being able to produce their own games and Bally not believing the
PONG incomes and sticking to their contract, the Syzygy/Atari trio decided not
to drop the ball, but to build their own machines. For that, they had to trick
Bally and make them reject PONG. The idea was a clever letter, mostly written by
Ted, and saying: "This isn't the game you're looking for... we'll give you
another." And so the
three guys found themselves building their first arcade uprights of PONG as
pictured on the left. Bally finally rejected PONG, but required another game per
contract.

By the end of March 1973, 8,000 to 10,000 PONG machines were sold. The same
year, Atari sold an improved version of PONG with two additional players: PONG
DOUBLES. Other variants were released later: QUADRA PONG, PIN PONG, DOCTOR PONG,
etc. However, Atari did not forecast an obvious problem: bootlegers. Several
other companies copied Atari's idea and released their own version of PONG. Some
even proposed special kits to improve it (check the one sold by
Logic Leisure Ltd). Later, Magnavox
discovered the existence of PONG and its public demonstration without
any royalty being paid for their Ball and Paddle game patent. They also
discovered a PONG machine along with several other
imitations during the 1973 MOA Show in Chicago. Ralph Baer came in person and discretely took notes
of all infringing games after having checked them. Later in 1974, Magnavox filed
a case against several manufacturers including Atari, Bally, and Seeburg.
Unlike others who eventually lost the battle, Atari preferred paying $1,500,000
to Magnavox and became one of their first licensees, which gave them the
required license for manufactring PONG machines coin-ops.

Note from David Winter: if you want to read the real history of Atari much
in detail (including many previously untold stories), I strongly recommend
Atari Inc. - Business Is Fun by
Martin Goldberg and Curt Vendel. From the link you can read more about
it, purchase your copy and even be informed of the second part recently
announced: Atari Corp. - Business Is War. Both books will tell
you the story as it happened in its most accurate version.